Dense wavelength division multiplexed (DWDM) optical transport networks are evolving towards the use of phase modulated optical data signals, the most promising signal formats being differential phase shift keying (DPSK) and differential quadrature phase shift keying (DQPSK). The increase in the bit rate used in optical transport networks, of up to 40 Gbs and 100 Gbs, results in lower tolerance to amplified spontaneous emission (ASE) noise, chromatic dispersion and polarization mode dispersion (PMD). Effective solutions for regenerating phase modulated optical data signals are therefore required in order to preserve the signal quality. A number of proposals have been reported for regenerating DPSK signals, but most do not tackle the main issue related to phase modulated data signal formats, namely the sensitivity to both phase and amplitude noise, and no viable solution has been presented to date for regeneration of DPSK signals. The most promising proposal was reported by I Kang et al, ECOC 2005, post deadline paper Th 4.3.3, comprises regenerative all optical wavelength conversion of 40 Gbs DPSK signals using a semi-conductor optical amplifier Mach-Zehnder interferometer. However the scheme reported by Kang et al alters the encoding of the data during the wavelength conversion process.